EU non company contractor - UK recruitment agency

[m0n1k3r]

Hi all

I run a recruitment agency in the UK and a client of mine in Germany has referred a contractor to me who currently works for them. They can't continue to employ him as it would appear he's an actual employee as his engagement has passed a certain time period. For a fee they have asked me if he can work via my agency instead.

My question is, can my UK recruitment agency employ him as a self-employed individual in Germany or would he need to invoice me via a German company of his creation?

Thanks in advance.

You need a license to operate as a 'labour leasing' company/staffing agency/employment business with German clients. The German-British Chamber of Commerce can help with that (for a fee, of course).

German contractors are self-employed. There are several tax incentives for them to do so. Companies in Germany are only for "real" businesses that intend to take on additional employees. It is pretty much only in the UK and Ireland that contractors work through limited companies.

There is a strict separation between employees (working for hourly rates with no defined outcomes) and proper freelancing/supplier (delivering defined deliverables and outcomes). The former is always deemed as temporary employment, and the hirer (e.g. you) will have to operate German social security and pensions contributions. In the latter case they can invoice as self-employed, and there are no license requirements.

The UK is gradually moving in this direction as well, although probably not requiring licensing.

[BlasterBates]

Problem described here.

https://www.freiberufler-blog.de/sch...-auftraggeber/

As long as you know what you're doing no problem (according to him, though lots of companies are nervous) but you do need advice from a lawyer I would say.

They tightened up the law recently.

[BlasterBates]

This isn't a tax evasion issue. It's to do with pensions and social security. The German tax office doesn't handle pensions, which is what it is about. Having said that, it can become a hot potato with the pensions dept, though normally it's an issue for the contractor, i.e. you're not unscrupulously providing cleaning staff to dodge social security payments.

If you are going to engage him for a completely new client no problem, if he is to be engaged at the same client then it does get a bit dodgy.

If you're not familiar with doing business in Germany probably best left alone.

[Andy Hallett]

My advice, when it comes to dealing with the German Tax Authorities is, in the words of Robert De Niro in Ronin, "If there is doubt, there is no doubt".

[dingobingo]

What would be the difference between him having to report his tax as an individual or as a company. The legal onus is on him in both cases to report his income. Why would you assume he's evading tax by working as self-employed? (unless self-employment in Germany is illegal in which case I see your point)

[eek]

Hi all

I run a recruitment agency in the UK and a client of mine in Germany has referred a contractor to me who currently works for them. They can't continue to employ him as it would appear he's an actual employee as his engagement has passed a certain time period. For a fee they have asked me if he can work via my agency instead.

My question is, can my UK recruitment agency employ him as a self-employed individual in Germany or would he need to invoice me via a German company of his creation?

Thanks in advance.

My advice would be to run as far away as possible from that as the Germany Tax authorities will have a field day with it...

[northernladuk]

Do you really want to bugger about with this for one person?

[radish2008]

Can your agency employ him whilst fully knowing you are aiding and abetting tax evasion ?

I suspect not.

[dingobingo]

Hi all

I run a recruitment agency in the UK and a client of mine in Germany has referred a contractor to me who currently works for them. They can't continue to employ him as it would appear he's an actual employee as his engagement has passed a certain time period. For a fee they have asked me if he can work via my agency instead.

My question is, can my UK recruitment agency employ him as a self-employed individual in Germany or would he need to invoice me via a German company of his creation?

Thanks in advance.